Hey everyone! Good morning and happy Monday!
In today’s newsletter, I highlight how one of my favorite technologies, the QR code, is poised to fundamentally alter our in-store payments experience. Also, I spotlight a new friend of Reconcile, who is working on a very interesting solution for couples to manage their money more easily.
Thank you to everyone involved with supporting Reconcile thus far, from waiting patiently on our waitlist to being a subscriber of this newsletter! When creating a traction slide for our recent investor pitch deck, I realized how thankful and blessed we, as a team, are to have the backing of hundreds of individuals. Every day, I’m excited to help all of you achieve your true dreams by simplifying your financial pains in the ass!
I would love to get feedback on how I’ve been doing with these newsletters! I started writing these a few months ago with two goals in mind: to educate and inform all of you about the latest trends in fintech and to form a like-minded community within Reconcile. Could you give me a grade on the quality of work so far?
I owe each of you a phone call and a hand-written thank you letter. If you would like a note, can you shoot me your address and your favorite author?
Big Fintech News of the Week
QR codes are back. This time it’s being used to support mobile payments. While QR, which stands for “quick response”, has been popular within the Chinese fintech ecosystem for years, it only has become more mainstream in the US.
During the pandemic period (including data from 2020 Jan. 23-May 6), government, businesses, and individuals used WeChat QR codes over 140 billion times in total.
As more retailers offer a touchless payment experience, QR codes embedded within mobile wallets will become commonplace. To visualize this, imagine paying for your goods just by presenting your mobile phone in front of a “socially distanced” QR code scanner. It’ll be just like scanning a barcode at a turnstile. Retailers benefit by enabling frictionless payment experiences without putting their employees or customers in danger of close contact.
The overall contactless payment market is expected to hit $4.68 trillion by 2027, according to a recent report by Grand View Research.
My first experience with QR was back in 2012 as I paid at a local Boston restaurant using my LevelUp app. Since then, I always wondered why QR hasn’t been featured more as a payment mechanism as it’s arguably more secure and easier to use than a traditional swipe or chip-based terminal. As the world goes digital, our legacy payments infrastructure including plastic cards and dirty, physical point-of-sale terminals needs to be retired. QR is so flexible as a technology that it can not only service payments but also be used by companies to direct customers to their websites, menus, app store pages, etc.
If you see a new use case for QR, I would love to learn more about it! Hit me up on Twitter, and I’ll give it a RT!
Reconcile Subscriber Spotlight
Can you tell our readers a little bit about who you are and what you’re working on?
Hi all! I’m Evan, a full-stack engineer based in Upstate New York. I’m an entrepreneur and love to solve meaningful problems. My favorite part of what I do is telling people that I “pay myself to solve puzzles all day.”
I’m working on a company called Gather, which is aimed at solving the many problems we see in couples’ finances. We want couples to talk more about their money, so we’ve built a real-time and collaborative platform to do budgeting, categorization, and gain insights into the money coming in your household.
Previous to Gather, I co-founded a company called nvite (Acq. Eventbrite, 2016) and have spent time at companies like Spotify and Next Big Sound (Acq. Pandora, 2015).
What drove you to start a fintech startup?
Really, it came down to solving a problem of my own: my wife and I recently got married and have been sharing and collaborating on our finances for a good 2-3 years prior. We’ve fallen back to an elaborate spreadsheet to do this work for us - there wasn’t a platform that we felt really scratched the itch. Naturally, as an engineer, I began to tinker along with my business partner, Mike, and Gather was the result.
This was a problem I had been obsessing over for the good portion of a decade, but the timing never quite lined up until now. What I love about Fintech, in general, is how permeating the problem set is: solving these money problems has a tremendous positive impact on a wide range of families and individuals. As a result, our customers are incredibly passionate about solving these problems too, further energizing us to build a world-class product for them.
What major problem are you looking to solve?
With Gather, ultimately we see the lack of communication and collaboration on a household’s finances to be one of the top stressors in a relationship. Through our platform, we hope to get people talking, but more importantly becoming proactive and productive with their finances. We strive to strike a balance between automation - that learns and grows with you over time - and manual intervention to make this experience delightful.
What are the gaps that you still see fintechs not addressing well enough?
Fintech is a very saturated industry. There is no shortage of machine learning-driven debit cards or AI platforms that can help you cut costs. That being said, I think being balanced with that experience is what is lacking in most Fintech products I’ve seen.
Hot take: people are obsessed with money, and even more so with their own money - trying to automate this completely out of their lives takes away from the human element: being in control. I see taking automation to each extreme (fully automated vs. completely manual) as creating too much of a binary experience for customers. We should be asking, “How can we save time for our customers while keeping them engaged and informed with their finances?” (Side note, we’re on the same wavelength here!)
What advice do you have for folks to learn about or enter the fintech space?
I would mention just a few sporadic thoughts here.
Firstly, the Fintech industry is up against institutions that have been around for decades upon decades. I see this as both a challenge as well as a huge opportunity. As with anything that’s been around for a long time, there are social norms and antiquated technologies to go along with it. Just because you are integrating with a modern Fintech API, doesn’t mean the institutions with the data behind it will necessarily cooperate or even be technically feasible (we’ve seen this already!). That being said, I think platforms like Plaid and neo-banks like Monzo and Simple have made monumental strides in modernizing the banking industry and opening up massive opportunities for entrepreneurs in the space.
Secondly, I’d mention data. If you don’t like data then Fintech will be a tough industry for you. Getting acquainted with concepts like data normalization and basic statistics/analysis algorithms will help you think about the problem set in a different light. Instead of approaching the problem as simple accounting, you may ask yourself, “What is meaningful to our customers with the data we have? What insights can I glean?” Money can be a sensitive topic. Storing someone’s financial data can be an even more sensitive topic. Learning about basic data encryption and potentially different standards and regional compliances can help you have a leg up in building a world-class Fintech product that people trust.
Lastly, I’d encourage entrepreneurs to become customer-obsessed. The Fintech industry is no excuse not to listen, listen, listen to your customers. You have the opportunity to affect a massive market positively. Make your experiences enjoyable and delight your users.
Thanks for reading!
Jaimin Desai - CEO & Co-Founder of Reconcile
*P.S. If you have any thoughts on our content, please leave a comment or email me at firstname.lastname@example.org!